[GOV] New exchange rate target (?)

Day 588, 14:23 • Published in Malaysia Malaysia • by Prime Minister's Department

Today we issued 8000 MYR for 40 gold. First of all I'd like to thank every congress member for their cooperation with regards to holding back their vote as long as possible. The plan was to see how the monetary market reacts to the proposal and vote yes or no on it in the end according to that. As there was no reaction and no bigger amount of MYR turned up during the day it became clear that printing is inevitable. Now we are voting on transferring this MYR to the Central Bank.

The question is what to do with this MYR and what should be our target for desired exchange rate. Should we try to push it down to 0.007 or 0.008 gold or should we try to keep it around the current level? My answer is that if we are here around 0.01 gold now we should at least try for 1-2 days to see how it works out. The real question is whether we can adapt to this new exchange rate or not. I know that prices and wages are quite sticky and economies are not totally flexible. Still the fact that the Malaysian economy is very small with only a handful of running companies and even less having job offers posted gives me hope that with good cooperation we can make this huge switch. I also think that we have better chances to adapt to a 0.01 rate than to a 0.008 one. The latter wouldn't be that noticeable and companies would probably be quite slow at adapting thus damaging their and the country's competitiveness. However a jump from 0.007 to 0.01 is such a big change that requires immediate adjustments. A kind of shock therapy. And if we fail then we still can print even more MYR and inflate it again to the previous levels in a matter of days.

What does this mean for company owners? Just two quick examples:
- If you paid a worker 50 MYR so far, you should pay him/her 35 MYR in order to have the salary's worth in gold unchanged.
- Also if you were selling a product for say 10 MYR so far then you should sell it for 7 MYR from now on.

Citizens shouldn't be afraid of their purchasing power decreasing as several companies have already decreased their prices to the new levels.
(Edit: this also means that at this point you can buy q1 houses from the Social Office for only 360 MYR or 3.5 gold. Send a pm if you are interested!
Edit2: And you can order grain from the Central Bank for 0.7 MYR or 0.0065 gold /stock.)

So let's see how this works out and let's hope that with good coordination and teamwork we can manoeuvre ourselves into a lot better position where we'd have a just as competitive economy as before but a lot stronger currency to go with it. And as I said if we fail we inflate. And then we will do it fast, too.🙂

Congress and government members, Citizens of Advisory please feel free to debate this topic on the forum as well in this topic: link.

Best regards,
Nagyzee

PS:
Official Malaysian chatroom is #erepublik.my at rizon.net
Official Malaysian forum is at: http://erepublik.forumotion.net/index.htm
Please join us there, too!🙂